Financial Daily from THE HINDU group of publications
Friday, Jan 18, 2002
Government - States
Bengal Govt threatens action against CESC
KOLKATA, Jan. 17
THE West Bengal Government on Thursday asked the RPG-controlled power utility, CESC Ltd, to surrender its licence if it is unable to service areas under its command in the city and industrial suburbs. The `threat' was issued by Mr Kalyan Bagchi, State Power Secretary, to Mr Sumantra Banerjee, the CESC MD, at a meeting in the power department.
This is the first time in CESC's 100 years of existence that it has had to face such a situation.
Briefing newspersons on the development, Mr Mrinal Banerjee, State Power Minister, said that while the licensor - West Bengal State Electricity Board (WBSEB) - had already passed such a resolution at one of its meetings, the State Government was intimating this officially to the CESC authorities for the first timeThe Minister also said that an exercise to review the areas under CESC had already been taken, and WBSEB would have to implement its decision in case there was no favourable response from the private sector utility.
In the run-up to this development, WBSEB had started a programme to regulate supplies to CESC saying that it could no longer buy power from the Central utilities (nearly 500 MW daily) and supply it to CESC free.
WBSEB insisted that CESC should at least be able to clear its current dues of around Rs 20 crore a month, if not pay up according to the schedule worked out a year earlier.
CESC, which owes nearly Rs 1,000 crore to WBSEB (including interest of Rs 172 crore), had made some payments till August 2001, before beginning to default.It has not been paying regularly either to DVC or WBSEB, resulting in both the utilities regulating supplies.
This has resulted in a shortfall of nearly 170 MW in the CESC area, taking the city back to the dark days experienced during the 1970s.
What had caused concern to the State power department was CESC resorting to power cuts even during the lean morning hours.The Minister said that this was possibly because they were forced to back down their own generation due to funds shortage. That was when the Government took the decision.
However, he added that all efforts would be made to maintain supplies during the forthcoming cricket match, perhaps by allowing some relaxation to CESC.
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